I was able to resolve the issue. I was using the latest AzureRM provider (v4.49.0), which was released just yesterday.

I restarted the setup (again), this time pinning the provider to a previous stable version (v4.48.0). After that, everything worked perfectly. The push succeeded without any errors and .gitignore was considered.

If others encounter similar problems with the latest v4.49.0 Terraform AzureRM provider, it may be caused by a build or packaging issue. Reverting to an earlier version seems to resolve it.